Tesla has been spending heavily as it works to stick to its production deadline for the mass-market electric sedan.

"We have made a solid start to what should be an exciting 2017," the company said in a letter to shareholders Wednesday.

Here's are the results versus what the Street was expecting:

EPS: A loss of $1.33 per share versus an expected loss of 81 cents per share, according to Thomson Reuters

Revenue: $2.7 billion in revenue versus expected $2.62 billion

According to Thomson, Tesla posted a loss of $1.45 a share on revenue of $1.15 billion in the same quarter last year.

After the earnings release, Tesla shares initially rose about 1 percent, before reversing course. The stock was recently down $8.13 or 2.6 percent, at $302.89.

While investors were likely encouraged that Tesla is sticking with its Model 3 production timetable, the company did raise concerns that the more affordable car was already putting a dent into sales of the pricier Model S.

During the company's earnings call, CEO Elon Musk disclosed that the company has seen "some impact on Model S [orders], as a function people being confused that Model 3 is an improved version of Model S."

The Model 3 will cost about $35,000 for a four-door sedan, compared to the Model S, which starts at around $70,000. Tesla said the Model S will always have more range and power as well as more customization choices than the Model 3.

Despite this impact, Tesla noted, revenue growth was robust in the first quarter.

Vehicle production in the latest period rose by 64 percent from a year ago, which helped Tesla to set its new quarterly record of 25,051 deliveries. That pace, which was up 13 percent from the fourth quarter, puts Tesla on track to meet its goal of delivering 47,000 to 50,000 cars in the first half of 2017.

In addition, average transaction prices improved from the fourth quarter of 2016, driven primarily by a favorable shift in product mix and higher option uptake.

On a GAAP basis, Tesla's automotive business had gross margins of 27.4 percent, up from 24 percent from the same quarter last year.

The company attributed this to improved average transaction prices and manufacturing efficiency. Tesla did not sell any ZEV (Zero-emission vehicle) credits during the quarter.

Tesla said it will not provide delivery guidance for the second half of 2017 until after the company begins Model 3 production.

Preparations at Tesla's production facilities are on track to support the ramp of Model 3 production.

Tesla is aiming to produce 5,000 vehicles per week at some point in 2017, and to increase that to 10,000 vehicles per week at some point in 2018, the company said.

Meanwhile, revenue for the energy generation and storage business increased mainly because Tesla recognized a full quarter of SolarCity revenue contribution, compared to only six weeks of activity for the fourth quarter of 2016.

Gross margins for its energy generation and storage business were 29.1 percent, versus 20.3 percent for the same quarter last year. This was largely due to improved energy storage margins, sale of energy credits and higher production of solar energy due to seasonality.

Heading into the second quarter, the company has about $4 billion of cash on hand, up from 3.4 billion at the end of the fourth quarter.

During the quarter, Tesla raised more than $1 billion in a debt and stock offering. Also, China's Tencent Holdings took a 5 percent stake in the company.

Tesla expects year-to-date capital expenditures will be slightly more than $2 billion by the time Model 3 production starts in July. The company also forecasts additional investments through the remainder of the year as it steps up automation at its factories and adds production capacity.

Throughout the year, the company plans to add "nearly 100 retail, delivery and service locations globally, representing an approximately 30 percent increase in facilities."

The car maker will also open its first fully-owned body shops to improve repair and maintenance services, which had been a concern among owners in recent months.

More than 100 mobile repair trucks are expected to be added in the second quarter. Tesla says that its cars are designed so that the majority of repairs can be performed without raising the car on a lift.